It is my great pleasure to attend the “Hamburg Summit: China meets Europe”. Known as the “City of Bridges”, Hamburg boasts a unique view with over 2,000 bridges. As I see it, Hamburg has even more intangible bridges that extend to the rest of the world. Hamburg has a time-honored tradition of free trade and had established the Hanseatic League back in the 13th century. Today, Hamburg is known to be the fastest transshipment port in Europe. In fact, one out of every three containers handled in the Port of Hamburg travels between China and Europe. This illustrates the long history and current dynamism of China-Europe exchanges.

The “Hamburg Summit: China meets Europe” 2014 has a rich program, including topics such as how China and Europe perceive each other, trade and investment order, urbanization in China, green growth, etc. I can see from the program that there is a great deal of anticipation for China-Europe cooperation. Cooperation requires more understanding of each other, so I wish to take this opportunity to brief you on the current state and future prospects of the Chinese economy.

Since the start of this year, in the face of a complex environment at home and abroad, the Chinese economy, under heavy downward pressure, has managed to maintain a stable performance on the whole. Its GDP grew by 7.4% in the first half of this year, a momentum that has basically continued into the third quarter. Although this figure is somewhat lower than China’s high-speed growth of about 10% in the past, it remains a medium-to-high growth rate. Worldwide, our growth rate is still high. Given China’s large economic size, the 7% increase in its economy today equals, if not exceeds, a 10% increase in its economy in the past. The increase is also equivalent to the size of a medium-sized economy.

In the beginning of this year and in recent months, there have been some small fluctuations in some of China’s economic indicators, yet the economy is still running within a reasonable range. It is inevitable to have some fluctuations, which also occurred last year. And the growth of other countries is not a perfect straight line either. We maintain that the Chinese economy needs to perform within a reasonable range. The growth target for this year is set at around 7.5%. I would like to draw your attention to the word “around”. This means that with adequate employment and relatively stable price levels, and as long as we could ensure parallel growth of household income and positive progress in protecting the environment, a growth rate slightly higher or lower than 7.5% would be considered acceptable. For the Chinese government, its focus is still on employment. Since the start of this year, although economic growth has somewhat slowed, employment has increased. From January to September, more than 10 million urban jobs were created, over 100,000 more than that of the same period of last year. Surveyed unemployment rate has stayed at around 5% in 31 big cities.

Economic growth is not a sprint but rather long-distance running that will never end. It demands certain speed. More importantly, it demands perseverance and staying power. The quality and efficiency of China’s economic growth is improving, something that we hope to see. With the continued rise of the proportion of the service industry, the rapid development of emerging industries such as e-commerce, logistics and express delivery, and the growth of high-tech industries and equipment manufacturing faster than the entire secondary industry, the adjustment and improvement of industrial structure has progressed by leaps and bounds. We have also seen encouraging results in energy conservation and emissions reduction. Energy consumption per unit of GDP was down by 4.2%, and carbon intensity down by about 5% in the first half of this year, the biggest cuts in years. With growing household income, consumer demand is also rising steadily. In particular, consumption by the general public is increasing rapidly. People have enjoyed tangible benefits in the course of economic development.

The Chinese economy has made these achievements thanks mainly to reform and innovation. Despite downward pressure on the economy, we have not adopted indiscriminate strong economic stimulus; nor have we ever eased monetary policy or expanded deficit. Instead, we have vigorously promoted reform in administrative, fiscal, financial, investment and other key areas and, at the same time, reformed and innovated the approaches of macro-control by promoting structural adjustment, namely targeted macro-control on the basis of range-based macro-control. Reform is also a stimulus on the economy, as it helps to improve both the micro-foundations and the macro-environment for economic growth, and could generate huge market vitality and social creativity. We have put in place a number of reform measures to incentivize market entities, strengthen weak links and boost the real economy, with an aim to release the massive dividend of reform for development.

Since the beginning of this year, the Chinese government has continued to spearhead a “self-targeted revolution” by substantially streamlining administration and delegating powers and promoting market-based reforms so as to boost the vigor of creation and innovation for more individuals and businesses. Since the adoption of reform on the business registration system last March, we have seen an over 60% year- on-year growth, a massive upsurge, in other words, on the number of newly registered market entities over the past six months and more. These new businesses, mostly small and micro-enterprises or players in the service sector, have generated more than 10 million jobs, and have become a new pillar of China’s economic growth thanks to their strong growth prospect. We have not only lowered the threshold of market access by offering much-needed policy support to these newly-established businesses, but also enhanced on-going and ex-post oversight, created a market environment featuring fair competition, and improved the social security network, so that those involved in entrepreneurship and innovation will have no additional worries and will grow healthily on the land we have fostered for them.

Speaking as I am, I think of a line from Goethe, which reads “If you want to love your own value, you must create value for the world.” Innovation and creation is the common ideal and pursuit of mankind. We have adopted these measures of reform and innovation so that the newly-born market forces will grow steadily, and that more people will see the hope and follow suit. In this way, we will see a massive wave of entrepreneurship and innovation by the people on the Chinese land. This wave will help everyone to grasp the opportunity of realizing the dream of greater accomplishments and a colorful life. It will enable us to turn our “demographic dividend” into “talent dividend” and improve income distribution and promote social equity, so that we could achieve sustained economic growth and all-round development of the people.

To ensure stable economic performance, we will be more proactive on the basis of maintaining overall policy stability. As a next step, we will further enhance reform and innovation. In addition to removing systemic obstacles, we will also address structural problems by strengthening weak links in development and in the real economy. For example, on finance and credit, we will make good use of both existing and additional resources to support the development of agriculture, rural areas, farmers, small and micro-enterprises, emerging industries and other forms of the real economy. We will continue to advance major livelihood and development projects such as railways in Central and Western China, renovation of urban run-down areas, water conservancy and pollution prevention and treatment, and make efforts to increase the supply of public goods. With the strong driving force of reform and innovation, we have every confidence that we could achieve the main targets for this year’s economic and social development.

The Chinese economy has been growing in a sustained and rapid manner for over 30 years, and it still has ample source of energy for future development. It has a bright prospect, thanks to its strong resilience of growth, as well as the huge market space and ample room for leverage. Many of you are old friends of the Chinese business community. As you may have noticed, China does have a number of advantages such as improved human resources, well-developed infrastructure, industries, capitals and technologies, and strong risk-resistance capability. Yet to know a country like China well, one also needs to see more than that, as China is a big country with over 1.3 billion people and there is uneven development between the urban and rural areas and among different regions. Much remains to be done before we could realize industrialization and urbanization. The broad space in China’s rural areas and inland provinces allows the economy to grow in an incremental and gradual manner, and these are where we find still a huge potential for development. As I see it, reform and innovation is the best “excavator” to bring out the potential. The diligent and hardworking Chinese people are making innovations on the system and science and technology development through their own wisdom, thus ensuring that the Chinese economy will maintain medium to high growth rate and move to the medium-and-higher end of growth.

China’s development is open development. The Chinese economy cannot develop without the world, and prosperity of the global economy also needs China. The Chinese economy will not head for a “hard-landing” as some have worried about. On the contrary, it will bear positively on the global economy, and serve as a significant force propelling world economic recovery. That, I believe, is conducive to China-Europe business cooperation and ensures mutual benefit and win-win outcomes in our cooperation.

China’s development requires a peaceful international environment and a stable neighboring environment. As the global political and economic environment remains complex, China makes a major force for upholding world peace, and China is committed to upholding stability and security at the regional level. China hopes that countries may join hands, respect and live in peace with each other and seek to achieve common development.

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